Essentially, yes, and compensation either singly or by both in combination can & have been used, although switching nuances viz. step/incremental change versus smooth/stepless or a combination will be chosen depending upon the condition or conditions being addressed.
Update via Edit function: According to material from ABB, reactor flows lend themselves to being controlled smoothly and steplessly, while individual groups of capacitor cans are switched in and out of service incrementally / in steps as conditions require.
If I'm grasping it correctly, the high-speed reactor control circuitry can be set up to anticipate the steps that are incurred when capacitors are switched, such that the jumps and steps to reactive flows all occur within the unit, while the combined output of the capacitors and reactors as seen from the outside is / can be very smooth.
The difference is noticeable; my utility uses some units that consist of switched caps only, and the incremental output of these units in response to system voltage changes is very evident. The smoothness of the output of the combined type is also very conspicuous, or perhaps it is better to say conspicuous by its absence of disturbance; one of ours in particular can be anywhere on a continuum from absorbing ~40 MX to producing ~60 MX.
You clearly get what you pay for.